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STANDARD 15 - EVENTS AFTER THE BALANCE SHEET DATE

EXAMPLES

I–Other examples of adjusting events after the balance sheet

- determination, after the balance sheet date, of the cost of assets acquired or the revenue from assets disposed of before the balance sheet date;

- determination, after the balance sheet date, of the amount of revenues collected in the course of the year to be shared with another government under the terms of a revenue-sharing agreement existing in the course of the year in designated;

- determination, after the balance sheet date, of the amount of payments to be made in respect of incentive or bonus plans if, at the balance sheet date, the central government had an actual, legal or implicit obligation to make these payments as a result of events before that date; and

-the discovery of a fraud or errors in the recognition of certain transactions.

II-Disclosure of non-adjusting events after the balance sheet date

- the acquisition or/reversal of a major controlled entity, or the outsourcing of all or practically all of the activities of an entity, after the balance sheet date;

-large-scale purchases or reversals of assets;

- the destruction of a large building after the balance sheet date;

- the announcement or commencement of execution of a major restructuring;

- the adoption of a regulation or international agreement providing for the exemption from reimbursement of loans made to entities or individuals within the framework of a programme;

- abnormally large changes in the price of assets or exchange rates after the balance sheet date;

- the fact of entering into substantial commitments or of being subject to possible liabilities, as for example with the issuing of substantial guarantees after the balance sheet date; and

- the commencement of a substantial legal case arising exclusively out of events occurring after the balance sheet date.

GLOSSARY 196/202

GLOSSARY 197/202

GLOSSARY

Active market

Market in which the items traded are homogenous, willing buyers and sellers can normally be found at any time and prices are available to the public.

Assets

An asset is a balance sheet item that has a positive economic value for the central government, meaning a resource controlled by the government as a result of past events that is expected to produce economic benefits in the future. The future economic benefits for the government mean either cash flowing to the government from the use of the asset or the potential production of services expected from the use of the asset for the benefit of the government or other entities, in keeping with its tasks or purpose.

In the central government’s separate financial statements, control over the resource is to be understood as direct control, meaning direct control of the asset by entities within the central government structure. Therefore, assets controlled by entities that are incorporated as separate legal entities under the control of the central government are not tracked as such in the central government’s separate financial statements.

Beneficiary of central government transfers

Categories stipulated in Article 5 of the Constitutional bylaw.

The end beneficiaries of specific public policy measures or systems in the case of transfers made directly by the central government and in the case of indirect transfers made through redistribution bodies.

There are four categories of beneficiaries:

- households, which are individuals or groups of individuals considered as consumers;

- enterprises, which are production units for goods and services, regardless of their legal structure, as long as the sales of their goods and services cover more than 50% of their production costs. This includes farm and non-farm sole proprietorships, financial and non-financial corporations in the public and private sectors, national public establishments in industry and trade and all other entities that meet the sales revenue criterion mentioned above.

- local and regional authorities, which are local and regional authorities per se, meaning communes, départements, regions and their affiliated or associated public establishments, along with public

establishments with territorial responsibilities;

- other entities, which are entities incorporated under public law, private law or international law that do not belong to the other categories defined above.

Carrying amount

Amount at which an asset is recognised in the financial statements after deducting accumulated depreciation and impairment losses.

Central government equity investments

Rights that the central government holds in other entities, which may or may not be represented by equity instruments and which create lasting links with the other entities. The rights may stem from:

GLOSSARY 198/202 - ownership of shares in the entities concerned or,

- the legal status of the entities concerned, or

- central government control (as defined in the standard) over these entities.

Central government financial assets

A group of fixed assets that includes equity investments and the related claims, along with loans and advances.

Central government financial revenues

Revenues derived from financial assets, cash, financial debts and derivative financial instruments. This does not include foreign exchange gains on transactions other than those related to central government financing and its cash position.

Central government intervention expenses

Payments that the central government makes as part of its economic and social regulation role. These include transfers and expenses arising from the enforcement of central government guarantees.

Central government policy operators

Entities controlled by the central government that carry out public service tasks under conditions that have been rigorously set by the central government.

Central government policy operators are active in the non-market sphere. Some of them manage intervention programmes.

The following criteria are used to classify a controlled entity in the category of central government policy operators:

- non-market activity financed mostly by the central government; - tasks and targets set by the central government;

- activities closely supervised by the central government.

The legal status of central government policy operators varies. They may be public establishments, associations, public interest groupings or any other form of entity.

Central government policy operators do not choose the direction of their actions. They rarely determine their own targets or intervention procedures, which are often set by regulations. Their autonomy is often limited to implementing the resources allocated to them.

Central government staff costs

Compensation of employees in cash and sometimes in kind for their labour, along with the expenses related to this compensation.

Contingent liabilities

Potential central government obligations vis-à-vis other entities that arise from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the central government; or central government obligations that are not likely or certain to give rise to outflows of resources with no equivalent consideration expected in exchange from the other entities.

GLOSSARY 199/202

Control of an entity

The central government’s power to govern the operating and financial activities of another entity so as to benefit from and/or bear the risks of such activities.

Control of a tangible asset

The central government’s power to govern the service potential and/or future economic benefits derived from the use of the asset. Furthermore, the fact that the central government bears the risks and expenses incurred in holding the asset shall also constitute a presumption of control.

Current assets

Assets that, because of their purpose or nature, are not intended for long-term use in the course of the central government’s activity.

Current replacement cost

The cost the central government would incur to acquire the asset at the reporting date.

Debt

A certain liability with precisely defined amount and maturity date (French Plan comptable, Article 212-2).

Depreciable amount

Gross value of an asset less its residual value.

Depreciable assets

Assets with a useful life for the entity that can be determined, meaning a useful life that is limited in time and measurable.

Depreciated replacement cost

Cost to be paid to replace the gross service potential of the asset. The cost is depreciated in line with the level of use of the asset.

Depreciation

Systematic allocation of the depreciable amount of an asset over its useful life.

Depreciation schedule

A representation of the allocation of the depreciable amount of the asset over time as the expected economic benefits or service potential are consumed through the use that is likely to be made of it.

Expenses

Decreases in assets or increases in liabilities that have no causal link to the arrival of a new asset or a decrease in liabilities. Expenses correspond either to the consumption of resources in the production of goods or services, or to an obligation to make an irrevocable payment to another entity that has no direct counterpart in the financial statements.

GLOSSARY 200/202 Expenses for the use of non-specialised buildings

Annual measurement of service potential utilisation based on the market value for buildings with a very long useful life that cannot be determined precisely.

Fair value

Amount for which an asset could be exchanged or a liability extinguished between knowledgeable, willing parties in an arm’s length transaction.

Finance lease

A lease that transfers substantially all of the risks and rewards incident to ownership of the asset to the lessee. Title may or may not eventually be transferred (IAS 17).

Financial debt

Debts arising as a result of a financing decision on the part of the central government. The counterpart to this debt are either funds for financing the central government that are redeemable in the future and give rise to remuneration or the counterpart is an asset that the debt is intended to finance.

Financial expenses

Expenses arising from financial debts, derivative financial instruments, cash position and financial fixed assets. They do not include bank service charges, penalties for late payments or interest and exchange rate losses on transactions other than those related to financing and cash position.

Fixed assets

Assets intended for long-term use in the course of the central government’s activity.

Gross value

Value of an asset on initial recognition or after revaluation.

Impairment loss

Loss of future economic benefits or service potential from an asset, on top of normal depreciation. Impairment of an asset occurs when the recoverable amount of an asset is lower than the net carrying amount.

Intangible Assets

Non-monetary assets with no physical substance held either to produce or provide goods and services, or to be rented to others, or for administrative purposes, and expected to be used over more than one period.

Intervention revenues

Revenues received with no equivalent exchange for the other party.

Inventories

Central government assets: